Colombo: Sri Lanka sought an additional credit of $1.5 billion (Rs.150 crore) from India to import essentials, the country has been facing its worst economic crisis in decades.

Sri Lank central bank governor said that the country is seeking additional financial credit from India.

The country of 22 million people is struggling to pay for essential imports after a 70% drop in foreign exchange reserves in two years led to a currency devaluation and efforts to seek help from global lenders.

Fuel is in short supply, food prices are rocketing and protests have broken out as Sri Lanka's government prepares for talks with the International Monetary Fund amid concerns over the country's ability to pay back foreign debt, Reuters reported.

The new line is on top of the $1 billion support extended by India to help pay for critical imports when Sri Lankan Finance Minister Basil Rajapaksa travelled to New Delhi earlier this month.

"There is a very close discussion going on for an additional support of $1.5 billion (with India) by way of oil support as well as other essential goods support of credit terms," Ajith Nivard Cabraal said an online event.

India has responded positively to Sri Lankan requests. It stated that it would meet the request for the new line, to be used for importing essential items such as rice, wheat flour, pulses, sugar and medicines.

India's support for the roiled Sri Lankan economy comes after previous administrations led by the Rajapaksa family moved closer to China for one decade and allowed China to invest in ports. 

Indian Foreign Minister Subrahmanyam Jaishankar met the finance minister and his brother, President Gotabaya Rajapaksa, on Monday.

"Reviewed various dimensions of our close neighbourly relationship," Jaishankar said in a tweet after meeting the president. "Assured him of India's continued cooperation and understanding."

In addition to the credit lines, India this year extended a $400-million currency swap and a $500-million credit line for fuel purchases to Sri Lanka.

Faced with a swiftly deepening crisis, President Rajapaksa has also sought help from Beijing, including a request to restructure debt payments.

His government is negotiating $2.5 billion in credit support from China, with a decision expected in the next few weeks. read more

Finance Minister Rajapaksa is set to fly to Washington, D.C. next month to start talks with the IMF for a rescue plan and also seek support from the World Bank.

Sri Lanka's government bonds fell on Monday after the IMF warned the country needed a "comprehensive strategy" to make its debt sustainable, Reuters said.